Proactive compliance visits continue, and statutory warranty and repair requirements - Motor vehicle industry bulletin 9

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Motor industry

10 September 2021

Proactive compliance visits continue, and statutory warranty and repair requirements

In this issue:

  • Continuation of the proactive compliance program
  • Navigating used car warranties and repair requirements

Proactive compliance program marches on despite COVID-19

Western Australia’s relative freedoms in operating business as usual, despite COVID-19, allows Consumer Protection’s proactive compliance program to have a renewed physical presence within the motor vehicle industry.

During our recent visits to randomly selected dealers and repair businesses, a common area of concern identified was the offer for sale of un-roadworthy used vehicles. This resulted in our officers issuing defect notices against those vehicles rendering them ‘unfit for sale’.

The proactive compliance program aims to help licensed motor vehicle dealers and repair businesses better understand and comply with their legal obligations, as well as identifying and remedying areas of risk through guidance, best practice and education.

Our visits will have an increased focus on: the information contained within the Form 1 – Dealers register of transactions; un-roadworthy vehicles; and comparison of the dealer or repair businesses’ list of current licensed employees against the records registered with us.

The below resource links will assist with your compliance with the laws and prepare for our impromptu proactive compliance visits:

Navigating used car warranties and repairs requirements

In our recent Motor Trade Association WA article, the Commissioner for Consumer Protection noted that warranty repairs and consumer guarantees on used vehicles are two of the most common automotive related queries we receive.

Statutory warranty and repair obligations

Dealers will know that they must provide a statutory warranty on used vehicles that are not more than 12 years old, have not travelled more than 180,000 kilometres and where the price is more than $4,000.

Statutory warranties do not apply to used vehicles outside of the above criteria. However, even if a statutory warranty does not apply to a vehicle, obligations still exist in relation to the sale of these vehicles under the Australian Consumer Law, including that the vehicle is safe and free from defects.

This means a buyer is entitled to expect a dealer will repair any defects present at the time of sale that prevent the vehicle from being used in the normal way. This also applies to anything that makes it unsafe to drive, for example faulty brakes or major structural rust, or anything that makes the vehicle unlawful to drive, such as bald tyres or window tinting that is too dark.

Assistance to help dealers

Our online guide, ‘Do I have to fix it?’, provides dealers with assistance to resolve warranty claims and prevent disputes. It contains a comprehensive list of potential issues and indicates whether the warranty may cover them. It also contains clarification on some warranty obligations such as the importance of carrying out repairs as soon as possible; owner’s responsibilities; and the supply of a courtesy car.

Outside this guide, a helpful question that dealers may ask themselves is whether the defect is likely to make the vehicle unserviceable or un-roadworthy. If the answer is ‘yes,’ then a dealer must repair the defect to a serviceable condition having regard to the vehicle’s age. This means a dealer is not required to fit new parts to a 10-year-old vehicle if there are serviceable second-hand parts available.

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